McDonalds Essays

McDonalds Essays McDonalds Essay McDonalds Essay McDonalds is the largest corporation globally which deals with a chain of the fast food restaurants. The company has been steadily expanding thus leading to its large global market base. The company has a competitive advantage over its competitors and this is due to its strategic management choices which have been made in the recent past.SWOT analysisMcDonalds has a very strong market position since it is the largest food service and the fast food retailing chain globally that is strengthened by the strong all round growth that is witnessed by the company. It is also important to note that the there is a growing health consciousness among the consumers and this has however added to the adversities of the company are brought to the business by a market that is saturated. With the combination of the rising beef prices there could be pressure margins for the company.Strengths.McDonalds has a market leading position in the industry and it also has a vigorous all round growth together wit h very strong brand equity. The company is also known for its consistency in its food industry and it also has very successful items such as fries and the Big Mac promotions. (Aaker, David 1984)Weaknesses.McDonalds also has some weaknesses which includes the operating losses in the Latin America region as well as the non McDonalds brand businesses. Similarly the company also has some relatively low productivity from the employees. The company also has some increased expenses in Europe. The company is also experiencing a decline in the market share and it also has a weak product development.Opportunities.McDonalds has very many opportunities including the alliance with the Warner home video as well as the new innovations in the menus which will further attract more consumers to visit the company’s chain stores globally. Similarly there is a rising Hispanic population in the United States of America and they are known as the best customers to the McDonalds chain stores because of the Hispanic foods which are prepared by the company. (Rowley Tashiro 2006)Threats.McDonalds is also faced with some threats such as the rising prices of the raw materials which further leads to the price increment of the food products and this further lowers the company’s consumer’s consumption. Similarly there exists a threat since most of the consumers of the company’s food products are becoming more health conscious and thus if the company fails to upgrade its products with health consciousness in mind then it might loose out on most of its consumers. On the other hand the company is further faced with a threat of market saturation and this will stiffen the competition that is experienced in the industry especially from McDonald’s main competitor Wal-Mart.Strategic choices for McDonaldsThe company has a growth strategy that is based on three main elements which areAdding the restaurantsMaximizing the profits and the sales at the existing restauran tsImproving the company’s international profitabilityBy the company maximizing its profits and also sales at its existing restaurants it can accomplish this through better operations, product refinement and development, reinvestment, effective marketing and also lowering the development and operating costs. This will however lead to the realization of an improved profitability internationally and the achievement of the economies of scale in the individual markets. This will also make the company highly benefit from infrastructure globally. (Arndt 2007)At the functional level McDonalds has adapted strategies which will lead to the expansion of the production of a wide range of food products by the promotion of new menu items. The company is also focusing on maintaining its quality and consistency of its food products as well as launch higher end restaurants under the new brands which would not be saddled with the company’s fast food image.At the global level McDonalds h as a strategy which has a global perspective thus the company has strategies which effectively integrates the three global forces which are the global business, the regional pressures and also the worldwide functions. The company at the global level wants to add more restaurants globally and this will expand its market base. (Anthony 1998)Comparisons between growth strategies at McDonalds and Wal-MartMcDonaldsThe company has a unique growth strategy which allows it to strategically locate its new stores across the nation in a leapfrogging manner unlike the other stores.The company’s growth strategy is not homegrown but rather international since it has bought some of its existing retail chains so as to preserve its control over its corporate culture.The company has a new strategy of leveraging its brand equity.The company’s strategy of product development focuses on the core business and it also covers the quality and taste issues.Another strategy that has been adapted by the company is the joint ventures and McDonald has changed the methods of dealing with its franchisees.McDonalds has a market penetration and development strategy that will allow it to continue with its international expansion.Wal-MartThe company has a unique growth strategy which allows it to strategically locate its new stores near the smaller towns and the distribution hubs.The company has a continued expansion of the super center format as well as the market share gains that are in the food business.The company has a strategy which focuses on the international growth and acquisitions.The company has a growth strategy that focuses on the expansion and the upgrading of its units in the Sams club division.The company has a strategy that is an eventual roll out of the neighborhood drugs store and market food format.The company has a strategy that leverages its productivity of the declining base in the discount stores with the food additional.The company also has a strategy of th e methodical approach to the on-line retailing. McDonalds Essays McDonalds Essay McDonalds Essay McDonalds has been a family name for the last many decades. It operates on a franchise based model which has enabled it to spread all over the globe. Its operations have been largely profitable. In fact, it was only in 2003 that McDonalds reported its first ever quarterly loss. Since then a lot has changed in the way McDonalds reaches out to the customer. This is the focus of the discussion here. James R. Cantaloupe, Chairman and CEO, McDonalds said in 2003 The world has changed. Our customers have changed. We have to change too. This laid the foundation for the change which McDonalds went through. A key aspect of understanding what strategy to follow is to re-assess the needs of the market. Also the companys relationship with the internal stakeholders like the franchisees needed to be reviewed. During the process of evaluation, McDonalds used the latest technological tools like the internet to enable their brand managers to communicate with the franchisees and compare and improve their services. McDonalds studied demographics to identify which customer profiles visited there franchises and for what reasons. They realized that kids were their biggest customers but to get the kids to come in to the restaurants the parents had to be convinced also. During the study they also identified health consciousness as a major factor driving people away from McDonalds. Another factor affecting sales was the products offered as customers were looking for options other than the complete meals offered. Delivery times also came up as important determinants of customer satisfaction. Based on the studies, McDonalds conducted SWOT analysis and came up with a new marketing strategy based on the marketing mix consisting of 4Ps Product, Price, Promotion and Place. They decided to focus on expanding the product range to include healthy and low cost options. They also reviewed their promotion strategy to target kids who belonged to the biggest consumer category. They also streamlined their processes to reduce delivery times. 2) Using relevant examples, evaluate how successful the organisations environmental scanning strategy is. Suggest how this strategy can be improved. The steps taken by McDonalds to change their marketing mix have been highly successful in getting the customers and the profit back. In 2006, McDonaldss had its best sales performance for 15 years in Europe. McDonalds decided to go in for a health conscious image. They offered a range of healthy food selections on their menu. They also started to publish the nutritional content details of the food items on the packaging. New Saver products were offered which promised a quick bite for a low price. These changes in the product offerings were supported by promotional campaigns designed win back the lost customers. The processes required for getting the product to the customer were also reviewed. This resulted in tie-ups with local vendors to ensure freshness of the inputs. McCafes were introduced as exclusive coffee shops to attract the young crowd which needed a meeting point to get together with friends. The advertisements which addressed kids specifically helped bring the kids back. Availability of healthier food options and information about the nutritional value of the available products has helped them win a large number of health conscious consumers. To increase customer satisfaction they also focussed on the time taken to deliver their products. McDonalds can take a number of steps to get a better understanding of the environment theyre a part of. This, if followed by appropriate changes to the marketing mix, can help enhance the sales performance and profitability in the future. Some of these possible steps are discussed below. The internet can be a very effective tool to reach the masses. McDonalds can use the internet to run online promotion and research campaigns. Also the use of the social networking options like Twitter and Facebook can be beneficial to understand their customers and their requirements better. Improved analysis of the supply chain processes can help in increasing their efficiency. This can result in reduced costs and therefore reduced prices for the customers thus increasing sales. McDonalds can also analyse the franchise locations so that they can be spaced more evenly compared to the current situation where the distribution is not so even.